Beige Book: No More QE For You Sir
The Market Ticker ® - Commentary on The Capital Markets
Posted 2012-04-11 14:37
by Karl Denninger
in Federal Reserve
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Beige Book: No More QE For You Sir
 

If your model includes more "easing" you have a problem.

Manufacturers in many Districts expressed optimism about near-term growth prospects, but they are somewhat concerned about rising petroleum prices.

....

contacts in several Districts expressed concerns that rising gas prices could limit discretionary spending in the months to come.

....

Overall price inflation was modest. However, contacts in many Districts commented on rising transportation costs due to higher fuel prices.   

....

Reports from Boston, Atlanta, St. Louis, and Kansas City indicate a positive near-term outlook for retail spending; however, contacts in Philadelphia, Cleveland, Atlanta, Chicago, and Kansas City expressed concerns that rising gas prices could limit discretionary spending in the months to come.   

....

Contacts in Boston and Atlanta expressed concern over high fuel prices as a possible drag on leisure spending.

....

A preference for part-time and temporary workers was seen in the Richmond and Atlanta Districts. Atlanta noted that temporary workers were being utilized in order to contain costs and retain flexibility, while some employers in Richmond prefer temporary workers due to uncertainty about future demand.

....

However, contacts in the Cleveland, Richmond, Atlanta, Chicago, Kansas City, and Dallas Districts cited rising transportation costs due to higher fuel prices. Minneapolis and Dallas noted that airlines have raised their fares to offset higher fuel costs. Richmond reported that rising fuel costs were a serious problem for both land and ocean shippers, while intermodal transportation firms in Dallas said that they had increased prices in response to higher fuel costs. In Atlanta, higher transportation costs were passed through to consumers without much difficulty. In contrast, contacts in Cleveland, Chicago, and San Francisco said it was difficult to pass through higher costs to consumers.

That's got to be a record for concentration of concern in one place with a single beige book.

And any further "easing" will drive oil prices higher.

Forget it folks; the QE gun has a stuck round in the barrel and an attempt to shoot again will cause it to blow up in Bernanke's face.

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User Info Beige Book: No More QE For You Sir in forum [Market-Ticker]
Cpugh111
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Pinckney, MI
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Who then buys all the debt the federal government is issuing?
Genesis
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Well now that could get interesting couldn't it?

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Sean
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Quote:
Well now that could get interesting couldn't it?


smileysmiley And I'm in a great position to wait and hide too!

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* I think Ann Barnhardt is more and more right. God help us!
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Crzymorse
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If inflation gets out of the bag then all bets are off. China would be buying out the ass if the federal reserve didn't. They are immediately ****ed if we start to inflate and demand higher yields.
Duc888
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Is it time for the 40% haircut on the top of fedgov's head yet?

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...burp
Genesis
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I say we shave 'em.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Asimov
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Cpugh111: Well, the fed is buying an average of 60% of the new treasury issuance, and 95%+ of the 20 and 30 year.

So....

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It's justifiably immoral to deal morally with an immoral entity.
If you trade based on what other people say, you will lose money. Especially what I say. I won't be held responsible. Festina lente.
Jkilkelly
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The alternative is they offer new issuance at a higher rate to attract buyers - ever thought of that?

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“They say there are no atheists in a foxhole. Well, there are no libertarians in a financial crisis, either.'' Jeffrey Frankel, Harvard economist
Jkilkelly
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higher interest costs could also be a back door way of forcing fiscal reconciliation

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“They say there are no atheists in a foxhole. Well, there are no libertarians in a financial crisis, either.'' Jeffrey Frankel, Harvard economist
Jkilkelly
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or the "floating rate notes" that are being discussed could also be another way to attract new interest in T's

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“They say there are no atheists in a foxhole. Well, there are no libertarians in a financial crisis, either.'' Jeffrey Frankel, Harvard economist
Cpugh111
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So...at what rate do you become interested in Treasuries 5%? 10% perhaps? how about 15%? No? What rate then?
Harrisonact
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canada
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no - ZIRP stays and America and the world crashes and burns as a unit. Hiking rates would kill America yet leave other countries standing.

Everyone goes over the cliff is the only model B52 understands.

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bilge
My playbook speaks español. Deal with it. Im too lazy to fix it.
Jkilkelly
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in a ZIRP world? we arent talking about 5%. In a world where we are the tallest midget? I think it would be easier to attract capital to US than to EU or Japan.

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“They say there are no atheists in a foxhole. Well, there are no libertarians in a financial crisis, either.'' Jeffrey Frankel, Harvard economist
Obsidian
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Quote:
The alternative is they offer new issuance at a higher rate to attract buyers - ever thought of that?


And just how are they going to afford that when debt is now funding more than half of all .gov expenditures?

http://www.zerohedge.com/news/us-posts-b....

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232-Th + n --> 233-Th --> 233-Pa --> 233-U.
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Killben
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"an attempt to shoot again will cause it to blow up in Bernanke's face."

Then I for one really hope he attempts to shoot and it blows up on his face. Good riddance! Honestly .. I cannot even say .. let him rest in peace.. I hope he rots in hell. But I cannot wait for the blow up..
Jkilkelly
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BB has stated over and over again in testimony that our fiscal problems need to be resolved and pose the greatest threat to our economy longer term. We cant continue this deficit spending and debt loading.

Perhaps, setting aside the assumption that everything he does is motivated by evil, the way the Fed forces Congress to act is to cause rates to rise and to back off from its purchases of T's

Possible?

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“They say there are no atheists in a foxhole. Well, there are no libertarians in a financial crisis, either.'' Jeffrey Frankel, Harvard economist

Genesis
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Possible. Against everything expected by virtually everyone in the market too.

But if gas prices keep going up it won't matter what he does; he loses control there and it's game over on the economy anyway.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Avianphlu
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Ulster NY
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i think its CTRL P to infinity which sounds insane...but look at what we have running the ship...yup...CTRL P
Genesis
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Yeah, right. Gas prices folks, gas prices.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Jkilkelly
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Gen absolutely right on - if prices continue to rise Obama loses his re-election.

He can't blame this on the "unfairness" of our tax code

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“They say there are no atheists in a foxhole. Well, there are no libertarians in a financial crisis, either.'' Jeffrey Frankel, Harvard economist
Andyc
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I believe they will still QE.


Its the only play in their playbook.


Possibly there could be some coordinated effort to cool the markets off then QE?


Dangerous time to be long though
Andyc
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I believe they will still QE.


Its the only play in their playbook.


Possibly there could be some coordinated effort to cool the markets off then QE?


Dangerous time to be long though


Have someone give JPM a collateral call and let the controlled temporary demolition begin!

I believe the central banks and investment banks are now coordinating together to control the markets and whatever manipulation it takes they will try.

: )

Time for the opposite of this

http://en.wikipedia.org/wiki/Working_Gro....

They can call it

The Presidents Malfunctioning Group on Financial Markets

which we will affectionately call The Plunge Enablement Team
thereafter.

heh

Ghopper
Posts: 2317
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Staten Island, NY
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I think there will be more QE.
They know it will do nothing but harm in the end, but they will need the quick fix to get to the election (or try to).

It is a political decision to boost the Markets and create some more phony demand.
Wineaux
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Wouldn’t the detonation of the Euro (strengthening of the dollar) give Chair Satan the flexibility to further devalue the dollar?

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